As lawmakers prepare to meet, TAB applauds the decision of 82nd Legislature to expand quality health care and increase control and budget certainty over skyrocketing Medicaid costs

AUSTIN, TX—Medicaid costs in the State of Texas currently consume about 28% of the entire state budget, which some state and federal officials project will grow to nearly 50% in the next three to five years, according to a new policy update released by the Texas Association of Business (TAB) today. When left unmanaged, skyrocketing Medicaid costs and utilization threaten to crowd out other state budget priorities such as education, criminal justice and transportation.

“Medicaid is already the single most costly item in the Texas budget,” said Bill Hammond, President and CEO of TAB. “Managing and working to control Medicaid cost drivers is a critical public policy goal for Texas. Proven cost savings and better health care outcomes show the need for the ongoing expansion of Medicaid managed care across all of Texas.”

In response to the need for improved and appropriate health care with increased state budgetary oversight, Texas lawmakers in 2011 enacted a series of Medicaid managed care expansion initiatives that were estimated to save Texas taxpayers over $1.2 billion over a period of two years. These initiatives included extending both acute and Long-Term Services and Supports (LTSS) managed care to the Rio Grande Valley–the last remaining non-rural region of the State in which Medicaid beneficiaries were still receiving less coordinated and more costly care-; expanding acute managed care to rural areas of the State; carving the prescription drug and inpatient hospital benefits into managed care; and moving Medicaid dental benefits to a managed care model. These changes were effective March 1, 2012.

Tomorrow, members of the Texas Senate will meet to review the expansion of Medicaid managed care and the other necessary cost containment strategies. To protect Medicaid beneficiaries, as well as Texas taxpayers, and to promote a well-functioning health care infrastructure, TAB encourages legislators to continue to support Medicaid managed care in all areas of the State and for pharmacy benefits, even in the face of complaints from some providers.

Medicaid managed care also helps to reduce fraud by adding increased accountability through an extra layer of review and oversight to root out fraud and inefficiencies, augmenting the work of the State.

Fraud is a major issue in Medicaid. Texas has seen Medicaid fraud recoveries of approximately $750 million since 2002. The Office of the Attorney General’s Civil Medicaid Fraud Division (CMF) and the Texas Health and Human Services Commission Medicaid Fraud Control Unit (MFCU) report:

· $747 million in fraudulent payments recovered since 2002.

· $614 million in fraudulent payments uncovered since 2002.

· 1,132 indictments for Medicaid fraud.

· 800 convictions on Medicaid fraud charges.“Medicaid managed care in Texas works, both for the Medicaid beneficiary and for the State budget. Texas employers and citizens deserve to have the best costs and the best access to health care services available to them. Medicaid managed care, and the oversight and management that it brings with it, helps to preserve Medicaid for those truly in need, reduce fraud and protect taxpayer dollars.”